Our Property Taxes Went Up After We Paid Them -- and We Got Stuck Owing Money

In New Jersey, where I live, the median property tax bill is $8,928. Compare that to Alabama, which has a median property tax bill of $742, and it's a wonder that people actually manage to afford to live here.

But for many people, New Jersey is a gateway to the higher salaries offered by companies based in New York City -- only without having to live in a cramped apartment the size of a glorified shoebox. As such, my family has called New Jersey home for more than a decade, even though owning a house in the Garden State can be a significant financial burden.

Now to be fair, home prices in some parts of the state aren't actually so outrageous. What tends to be more of a problem is the property tax bill that comes with your home. Even if you manage to sign an affordable mortgage, your taxes might end up costing more than your monthly mortgage payment, depending on the part of the state you reside in.

When my husband and I bought our current home about 14 years ago, we knew to set aside plenty of money in our budget for property taxes. And we also knew to boost our savings account balance before buying our house. That ended up being a really good thing, because we faced a very unpleasant property tax surprise our second year living in our home.

When your property tax bill is wrong -- and you end up paying the price

The home my family lives in today is a home we watched get built from the ground up. And while there were pros and cons to buying new construction, one downside didn't make itself obvious until our second year of living in our house.

When we first moved into our home, we were given an assessment of its value, and our property tax bill was based on that assessment. We paid our property taxes in full and figured that was that.

A year later, we got a notice from our township saying that because we'd purchased new construction, they hadn't gotten a chance to assess our home properly. Because of that, we were underbilled for property taxes our first year in our home. And as such, our township demanded a few thousand dollars extra from us almost a year after we were finished paying the previous year's property tax bill.

My husband and I were shocked and outraged. We didn't see how on earth we could be expected to have to pay that bill retroactively when it was our township that billed us incorrectly. But we also figured that if we were to try to get a lawyer and fight that bill, we'd spend more money on legal fees than the amount we were being asked to pay. So in the end, we dipped into our savings, wrote that extra check, and just dealt with it.

Be careful when buying new construction

There are different surprise expenses you might encounter when buying a new construction home, like having to pay a premium for upgrades and finding out there are certain features your builder isn't including (we had to buy our own towel rods and bathroom lighting, for example). But also, don't be surprised if your initial property tax assessment ends up being inaccurate.

To this day, I'm still not totally convinced that our township had the legal right to go after us for higher property taxes a year after the fact. But I'm also still, to this day, not in the best position to determine that since I'm not a real estate lawyer and don't wish to pay for one to simply satisfy my curiosity.